Woolwich Equitable Building Society v Inland Revenue Commissioners

This appeal concerned repayment of tax paid by a building society while challenging the vires of the Income Tax (Building Societies) Regulations 1986 and whether interest was payable on sums repaid for the period between payment and the later declaration that the regulations were ultra vires. The judgment engages the provision of the Supreme Court Act 1981 identified in the notice as section 35A as relevant to the question of interest.

The court considered the legal basis on which a public authority may be required to pay interest when it repays money following a successful challenge to the validity of secondary legislation. The precise statutory and equitable basis for interest was examined as part of the determination.

Background and parties: Woolwich Equitable Building Society paid tax under the Income Tax (Building Societies) Regulations 1986 while contesting the regulations' vires. The Inland Revenue later repaid the tax after the relevant regulations were declared ultra vires. The dispute concerned whether interest was payable on amounts repaid for the period from payment to the decision declaring the regulations invalid.

Nature of the claim: The claim sought repayment of tax together with interest for the interlude between payment and repayment following the invalidation of the regulations.

Procedural posture: The matter was considered by the House of Lords. Not stated in the judgment are the detailed prior steps in the appellate history.

Issues framed:

1. Whether interest was payable on the repaid tax for the intervening period;
2. The legal basis for entitlement to interest, including any application of the Supreme Court Act 1981 section 35A or other statutory or equitable principles;
3. Whether payments made "without prejudice" while challenging vires affect entitlement to interest.

Court’s reasoning (concise): The court analysed the legal foundation for awarding interest where tax has been paid and later repaid following a finding that the underlying regulation was ultra vires. The relevance of the Supreme Court Act 1981 (section 35A) to interest on repayments was considered. The court addressed how the character of payments made while challenging vires bears on the availability of interest. Specific subsidiary findings and the court’s final disposition are not stated in the judgment text provided.